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Heterogeneity-promoting Optimal Procurement

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Author Info
Juan J. Ganuza ()
Lambros Pechlivanos

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Abstract

When procurement takes place in the presence of horizontally differentiated contractors, the design of the object being procured affects the resulting degree of competition. This paper highlights the interaction between the optimal procurement mechanism and the design choice. Contrary to conventional wisdom, the sponsor's design choice, instead of homogenizing the market to generate competition, promotes heterogeneity.

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File URL: http://www.econ.upf.edu/docs/papers/downloads/377.pdf
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Publisher Info
Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 377.

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Date of creation: Jan 1998
Date of revision: Jan 1999
Handle: RePEc:upf:upfgen:377

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Web page: http://www.econ.upf.edu/

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Related research
Keywords: Procurement; project design; horizontal differentiation;

Other versions of this item:

Find related papers by JEL classification:
L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
D44 - Microeconomics - - Market Structure and Pricing - - - Auctions

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  1. Asker, John & Cantillon, Estelle, 2007. "Procurement when Price and Quality Matter," CEPR Discussion Papers 6082, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Asker, John & Cantillon, Estelle, 2005. "Optimal Procurement When Both Price and Quality Matter," CEPR Discussion Papers 5276, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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This page was last updated on 2009-11-27.

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